Trump's reciprocal tariffs take effect on April 2: How India, Thailand, and others will be impacted

India, Thailand and South Korea among the most vulnerable

According to an analysis by S&P, India, South Korea, and Thailand are likely to feel the brunt of these tariffs. India, in particular, faces an average tariff of 9.5 per cent on US exports, and key sectors like pharmaceuticals, gems, and automobiles could see significant price hikes. The US exports account for just 2.3 per cent of India's GDP, but the imposition of tariffs could cost India up to USD 7 billion annually.

China and the European Union to Face Stricter Trade Measures

China, with its long-standing trade disputes with the US, is also likely to bear the brunt of Trump’s tariffs. China’s exports to the US are already subject to high duties, and the situation may worsen with new tariffs. Similarly, the European Union, a key trading partner of the US, is expected to face tariffs on cars, agricultural products, and machinery as Trump seeks to narrow the trade deficit with the bloc.

The impact on Mexico and Canada: Growing tensions

Mexico and Canada, two of the US’s closest trade partners, will also face tariffs as part of the new policy. Both countries have expressed strong objections, with Mexico preparing retaliatory tariffs. The new measures could strain diplomatic relations and impact existing trade agreements like the USMCA.

What are reciprocal tariffs?

Reciprocal tariffs are a trade strategy in which one country imposes duties on imports in response to tariffs imposed by another country. This aims to balance trade and protect domestic industries. As countries like India, China, and the EU prepare for the imposition of these tariffs, the global economic landscape may see significant shifts in the coming months.

Global trade fallout: Will countries retaliate?

As the US pushes forward with its tariff policies, countries across the globe are weighing their options. Some have already indicated they will respond with their own trade barriers, making the international trade environment even more uncertain. With the world’s largest economies grappling with these new tariffs, the global economy could face a turbulent year ahead.